In recent years, the California Hospital Association, a Sacramento-based trade group, has emerged as an advocate for its members when it comes to some of the more contentious issues in the state, including healthcare reform, earthquake safety and nursing ratios.
This year, OC resident Barry Arbuckle will be front and center as the association’s 2008 chairman. Arbuckle’s main job is as chief executive of Huntington Beach-based MemorialCare Medical Centers.
The association represents nearly 450 hospitals and health systems throughout the state. Its functions include public policy development, issue management and legislative advocacy at the state and federal levels.
The California Hospital Association was an early, enthusiastic backer of Gov. Arnold Schwarzenegger’s $14 billion healthcare reform plan.
The group suffered a blow late last month when the proposal went down before the state Senate’s Health Committee. It said it would continue to work with the Republican governor and Democratic-controlled Legislature to achieve reform.
The Business Journal’s Vita Reed recently sat down with Arbuckle and discussed some of the association’s goals and thoughts on current laws.
The association supported Schwarzenegger’s healthcare plan. Why did you do this and what would you like to see come out of any final legislation?
The fate of California’s healthcare reform impacts our state’s 36.5 million residents,from their overall health and wellness to sustainability of the economy and our communities.
Nearly 6.8 million Californians are uninsured for all or part of a year,three-quarters in working families, with most having no health coverage through employers. When you add inadequate insurance coverage, those at risk reaches almost one-third of our state’s population.
Results can be devastating. With a lack of health insurance forcing many to forgo needed care until later in the disease process, health conditions can worsen. Many end up in emergency rooms, the most costly place to see a doctor.
At a time when 47% of hospitals in Orange County operate in the red, and positive margins for the remaining average just 2.5%, we all share responsibility for creating reforms that cover the uninsured, protect long-term stability of hospitals and safeguard access to care.
Of enormous concern is Medi-Cal, the state’s health insurance for 6.5 million low-income children, their parents and the disabled.
Medi-Cal payments to hospitals are the lowest in the U.S.
New York, for example, reimburses more than three times higher. With hospitals losing 40 cents to 50 cents on every dollar they provide to Medicare patients, providers willing to accept Medi-Cal are decreasing, taxing an already fragile system.
During the past decade, 70 hospitals and 65 emergency rooms in California closed.
Paramedics often scramble to identify a hospital for the critically ill and injured. Many hospitals cannot afford the high costs of maintaining emergency services because many patients are uninsured or underinsured.
The trauma system is also at risk,only three of the original six trauma centers in OC remain.
California hospitals are vulnerable due to issues unique to our state. In addition to low government reimbursement from Medi-Cal and Medicare (40% or more of the average hospital’s business), we face significant labor shortages. Unfunded mandates like seismic safety retrofit requirements cost California hospitals billions of dollars. And in 2006, California’s hospitals provided $8.6 billion of uncompensated care, including a $2.1 billion Medi-Cal shortfall.
California’s hospitals applaud the governor and Legislature for their commitment to enact a comprehensive health reform package and will continue to work for the best solution.
Since Schwarzenegger made mandatory insurance part of the plan, what type of benefits could it bring to your member hospitals?
The benefits of offering health insurance to more Californians affect the well being of everyone in our state, not only hospitals. Health insurance improves access to care and results in Californians leading healthier, more productive lives. It slows increases in healthcare spending, thanks to better access to physicians, preventive care and community services.
For those without health insurance, the outcome can be life-threatening. The nonpartisan Urban Institute recently released a study stating that the absence of health insurance is responsible for a range of consequences, including lower quality of life, increased morbidity and mortality and higher financial burdens. Based on data from the Institute of Medicine and Census Bureau estimates of insurance coverage, it was predicted that 137,000 people nationwide died from 2000 to 2006 because they lacked health insurance, including 22,000 people in 2006.
We have been working with the governor’s administration and other stakeholders for several months to reach an agreement on a comprehensive healthcare reform package benefiting all Californians.
While it has been difficult to reach consensus among lawmakers, we must continue to work collaboratively and act decisively to meet this healthcare crisis head on. Californians deserve no less.
His plan also includes new fees on hospitals. Are you comfortable with that? If not, do you feel he can make changes or do you consider the fees a necessary evil?
Our hospitals, their employees, physicians, board members and volunteers who commit their lives to improving the lives of others are keenly aware of the need for health insurance for Californians.
That is why, in addition to supporting a number of Schwarzenegger’s initiatives for healthcare reform, the California Hospital Association supports a new 4% assessment fee on hospitals with monies matched by federal funds to increase hospital Medi-Cal payments and expand uninsured coverage.
Hospital assessment fees alone will not ensure hospitals survive. While the association negotiates an agreement with the governor on a broad package of financing reforms, hospitals need long-term financial protections. There must be adequate financing available to fund the comprehensive proposal.
Endorsement by the California Hospital Association of the governor’s proposal includes an agreement that there be long-term stability and predictability of the financing of hospital services with hospital fees capped at 4%. Our support is also based on agreeing that Medi-Cal payments be raised to the maximum allowed under federal law, with annual payment increases to reflect rising costs of care for Medi-Cal patients. While this is a very positive step, these payments will still fall short of covering the actual cost of care,but less so.
It is important that all funds generated by a hospital fee be placed in a separate hospital trust account, apart from the general fund. Monies resulting from hospital fees must be spent first to raise Medi-Cal fee-for-service inpatient and outpatient payments to hospitals to the maximum allowed under federal laws, and to increase Medi-Cal managed care payments by the same amount.
Remaining monies should be used to expand coverage to the uninsured. Hospitals must be guaranteed annual Medi-Cal rate increases; and the state’s current general fund expenditures to hospitals continued, increased annually and are in addition to new monies generated by the hospital fee.
The guarantee that annual Medi-Cal payments increase to the maximum allowed by federal law is critical. While California ranks dead last in Medi-Cal reimbursement, we still bear significant labor, pharmaceutical, medical equipment and supply costs, which are increasing annually.
Hospital fees must be part of a more comprehensive reform plan to include new revenue sources from employers, health plans, government, other providers and individuals sharing financial responsibility associated with covering more Californians.
Now that the state is giving more time for the industry to comply with seismic regulations, what’s the obligation for the industry? Do you feel there is one?
The California Hospital Association supports the recent decision by the California Building Standards Commission to approve new regulations improving the methodology for more accurately determining the seismic risk of the state’s hospital buildings. The decision to use Hazus, a new federally developed modeling technology, will help us preserve access to care for millions of Californians while helping ensure buildings are safe during an earthquake.
The goal of having earthquake-compliant hospital buildings is a critical public policy objective long supported by the association and member hospitals. All of us,nurses, doctors, patients, hospital leaders and government officials,want our hospitals to withstand and remain operational following a major earthquake. By implementing new Hazus methodology, resources can be directed toward ensuring the most vulnerable buildings are addressed first.
Nursing ratios are now part of the law. What sort of initiatives can you, as an association, get involved with to stanch the nursing shortage?
The greatest challenge facing the U.S. workforce is a critical shortage of health professionals, especially registered nurses. The problem is especially acute in California, with the least nurses per population and in need of an additional 116,600 new nurses by 2020.
Our state ranks 50th with 622 registered nurse jobs per 100,000 population. That’s compared with national statistics of 787 registered nurse jobs per 100,000 population.
Nearly 50% of California registered nurses were educated outside the state or U.S., and more than 70% have associate degrees.
The nurse shortage is not the result of a lack of interest in the profession, but insufficient educational capacity. In California in 2005, the 8,749 slots for nursing students were filled to 98% capacity with more than 14,000 potential nursing students turned away due to this lack of capacity.
The California Hospital Association is working to increase both numbers of healthcare programs and slots available for qualified students.
Hard-to-fill positions range from registered nurses, nurse educators, respiratory, physical and occupational therapists and clinical laboratory specialists to technologists in nuclear medicine, radiology, histology, surgery, magnetic resonance imaging, coding, business and information services.
